Cinema in the Digital Age - Thesis


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This is a practice-based dissertation that talks about Cinema in the Digital Age: New Financing and Distribution Models.
To explore this topic I have researched books, articles, speeches and movies of relevant authors; I have also interviewed filmmakers and entrepreneurs related to these new models of cinema financing and distribution in the digital age.
In addition I have used my own experience as a creator to produce a meta-documentary that complements this thesis, you can watch it here:

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Cinema in the Digital Age - Thesis

  1. 1. Cinema in the Digital Age: New Financing and Distribution Models.Beatriz CebasMA Media, Communications and Critical PracticeLondon College of Communication (University of the Arts, London)December 2011    
  2. 2. Content pageAbstract………………………………………………………………………………1Acknowledgements…………………………………………………………………..21. The establishment of digital cinema……………………………………………..3-72. Welcome to the “prosumer” age………………………………………………..8-173. Is the Hollywood distribution system breaking up? ………………………….17- 234. The end of gatekeepers…. But not yet.………………………………………..23-27Bibliography.……………………………………………………………………..28-34Appendices.……………………………………………………………………….35-81This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 UnportedLicense. To view a copy of this license, visit or send aletter to Creative Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA.    
  3. 3. AbstractThis is a practice-based dissertation that talks about Cinema in the Digital Age: NewFinancing and Distribution Models. To explore this topic I have researched books,articles, speeches and movies of relevant authors; I have also interviewed filmmakersand entrepreneurs related to these new models of cinema financing and distribution inthe digital age. In addition I have used my own experience as a creator to produce ameta-documentary that complements this thesis.The dissertation is divided into four parts. The first one is an introduction where Iexplain how the digital revolution is changing the filmmaking. The second one isfocused on a new finance model attached to digital media: crowdfunding. The thirdpart talks about the digital distribution model exploring if it could break down theHollywood distribution and exhibition system. The fourth one concludes this thesisputting together my own experience as a filmmaker who has used a crowdfundingplatform in order to get funds to produce her project, and the conclusions obtainedabout the explored issues. The meta-documentary Cinema in the Digital Age. Mycrowdfunding experience, enclosed in a DVD completes this dissertation.   1  
  4. 4. AcknowledgementsI would like to thank my family and friends for their endless patience; and the LondonCollege of Communication, especially the tutor of this thesis, Jonathan Wright, for hissupport.I am grateful to Nicolás Alcalá from The Cosmonaut, Joan, Jònas, and Adrià Salafrom Verkami; Carlos Hervás and Rafael Cabanillas from Lánzanos; Jaume Ripollfrom Filmin; Gregory Vincent from Sponsume; Olivier Schulbaum from Goteo; OdileCarabantes and Joaquim Guinovart from Compartir Dòna Gustet, Raúl Deamo fromDeconstruint el vi català; Ignasi Labastida, from Creative Commons Spain; VirginiaNevado, from Yelmo Cineplex; and Dora Sales for their time and valuable help.This dissertation would not be possible without the help of 35 backers who havefinanced the meta-documentary Cinema in the Digital Age. My crowdfundingexperience. These are their names: Patricia Hevia, Isabel García, Daniel Seuba,Patricia Calzado, Mariví Tierno, Esther Cebas, Damián de León, Marta Aguilera,Joan Sala, Javier Sánchez, María Vicente, Sara Ayuso, Iago González, Ángel LuisFernández, Emilio Cebas, Irene Fuentes, Miriam Hernanz, “anonymous”, Noelia SanMartín, Paula Astudillo, Sara Condado, Eduardo Laporte, Gonzalo Martín, DamarisRodríguez, Pablo Sáenz de Tejada, Talia Leibovitz, Noemí González, AntonioCollado, Fernando Cuerpo, Sara Sánchez, Producciones Doble Banda, ChemaRodríguez, Juan David Orozco, Irene Gómez, and Andrea García.   2  
  5. 5. 1. The establishment of digital cinemaCinema follows the Heraclitus maxim that says, “There is nothing permanent exceptchange”. Since the early beginning of cinema at the end of the nineteenth century, thismedia has experienced significant changes. The first dramatic change took place in1920 with “the arrival of the talkies” (Jill Forbes and Sarah Street, 2000:29).Currently the industry is experiencing a transformation in its traditional models offinancing, distribution and exhibition because of the explosion of the newtechnologies. Even we are in a transitional period that makes difficult to predict howthe digital revolution will develop in the future, its importance and deepness announceit as the second most relevant change in Cinema History.Digital devices and new media have established, relegating analogical technology andtraditional media, they have also changed the way we communicate. Quoting JohnPalfrey and Urs Gasser, “the digital era has transformed how people live their livesand relate to one another and to the world around them” (2008:3). In which waysthese changes affect on cinema? The media specialists Lev Manovich wrote in 1999“today we are in the middle of a media revolution” (1999:43). Twelve years afterthese words were written we should open up the media revolution idea to a digitalone. Even Brian McKernan affirmed in 2005 that it “is still in its infancy” and “its fulleffects yet to be determined” (2005:193), now, in 2011, we can confirm computersplay the leading role of this revolution and the establishment of digital era.Digital media “affects all stages of communication, including acquisition,manipulating, storage and distribution”, but the computer media revolution “alsoaffects all types of media -text, still images, moving images, sound, and spatialconstructions” (Manovich, 2002:43). The establishment of computers as an essentialtool for the society is a key factor to understand the origin and evolution of thisrevolution. Focusing on cinema is easy to detect we are in the middle of a transitionalage; films are still turning from analogical to digital so both formats coexist togetherwith hybrid ones. What some years was understood as an extravagance, filming awhole movie and exhibit it with digital technologies today is a common practise. But,what is digital cinema? We could say any movie that uses a computer in some part of   3  
  6. 6. its creation process is digital. Following this idea, every film since the establishmentof non-linear editing software during the 80s is a digital movie because from thatmoment on all the movies are postproduced by computer programs. Digital camerasare slowly replacing the expensive 34 mm ones; especially by indie filmmakers thathave seen reduced their expenses making their small productions affordable.On the other hand, digital technology is not always a synonymous of cheap oraffordable, “digital cinema is a term that can also apply to Hollywood movies just asmuch as it does to indie filmmaking, and it can includes everything from relativelyinexpensive productions shot with ‘prosumer’ camcorders to big-budget effects-ladenmovies made with the most advanced technology” (McKernan, 2005:preface). Somelaureated filmmakers like Francis Ford Coppola, George Lucas or James Cameronhave invested a large amount of money in digital technology in order to innovate thecinema’s concept. Some famous examples of productions all made on digital are theGeorge Lucas Star Wars Episode II: Attack of the Clones (2002), and the JamesCameron Avatar (2009).Digital technology approaches the art of cinema to a wider audience too becausethanks to it more people can explore into the filmmaking process; McKernan goes astep further to affirm that “today’s digital technology has democratized this mostpowerful form of storytelling, making it affordable enough for practically anyone touse” (2005:preface). But this democratization does not mean everyone is a creator justfor the fact of having a reasonably priced and high quality camera like the Canon EOS7D. The reduction in the price of technology has made it affordable and accessible formost of the people but technology is just a tool, so this democratization does notnecessary mean more quality products, it just mean more products. “Pick up a camera,anyone can make a movie’ just isn’t reality”, warns John Manulis, CEO/Producer atVisonbox Media Group, “the fact is that ‘just anyone’ can’t just make a movie”(Manulis quoted in McKernan, 2005:131). The Director of Photography MikeCarporale is “thrilled at the democratization that digital filmmaking brings”, but heagrees Manuli’s idea affirming, “having the tools does not make everyone a goodstoryteller” (Carpolare cited in McKernan, 2005:144-138). Digital technology helps   4  
  7. 7. cinema creators to develop their projects but there is a maxim that has not changed:“There has to be a good storytelling” (Carporale quoted in McKernan, 2005:144).Historically, cinema was created as a medium to document reality but in the currentdigital age moving images are easily manipulated, “shot footage is no longer the finalpoint but just raw material to be manipulated in a computer where the realconstruction of a scene will take place” (Manovich, 2002:255). One could interpretthat cinema is loosing its documentary component, but is important to remember thecinema is a changing art that has redefined its own identity as many times as any newtechnology was launched.Computerization transforms cinema’s identity because it does not just show realimages anymore but also a created and manipulated digital reality; “the cinematicrealism is being displaced from being its dominant mode to become only one optionamong many” (Manovich, 1999:14). Following Manovich’s ideas, the “most dramaticexample of the new status of cinema” (1999:7) is the idea that creators are returningto the pre-cinematic practices where they used to directly paint images; right now theydo the same but instead of painting them by hand they do it by computer programscreating an “elastic reality” (Manovich, 1999:47); in other words, they build a realitythat can be digitally transformed. Thanks to the use of these nineteenth centurypractices in the filmmaking process, “film obtains the plasticity which was previouslyonly possible in painting or animation”, relegating its “visual realism unique to thephotographic process” (Manovich, 2002:5). New technologies also offer “morealternatives for capturing moving images than ever before” (McKernan, 2005:65);some filmmakers like David Lynch defends that digital cinema gives artist “moreroom to experimentation” and “whatever you can think, you can get" (Lynch cited inMatt Hanson, 2004:81), something unthinkable before the computer age.But we cannot forget that “digital also defines the cinema technology that’srevolutionizing the way movies are made and exhibited” (McKernan, 2005:16). Thetransformation from analogical to digital exhibition is another important point tounderstand why digital revolution means such a dramatic change on cinema industry.During a century, the filmmaking process has significantly developed but “the basics   5  
  8. 8. of movie projection really haven’t changed at all since the days of Thomas Edison”(McKernan, 2005:161). This fact is about to change with the establishment of digitalprojectors on theatres that is already globally happening.What are the differences between analogical and digital exhibition? Digital is a term“used to describe distribution and projection of films in a digital form without theneed for physical film prints”. There are some advantages in digital projection, first ofall, it is cheaper because “instead of having to be physically transported to theatres inlarge, heavy film cans by fleets of trucks, digital movies can be distributed to theatresvia satellite” (McKernan, 2005:185). It involves print savings too, while “the cost ofconventional celluloid print production is between $5-8 million per film”, the cost perdigital print is about “$1200-2000” making a potential savings of “over $1 billion”(Michael Allen, 2009:67) to the industry. However, if there are so many powerfullogistical and economical advantages, why there are just a few theatres changing theirold analogical projectors to digital ones? Probably the main reason is “digital motion-picture distribution and exhibition is still in its early days” not to mention that “theHollywood film industry is basically a conservative environment that adapts tochange very slowly” (McKernan, 2005:94). Something similar happened with thearrival of talking films in 1920s; at that moment it was necessary the investment forthe “conversion to synch sound” (Allen, 2009:68), but exhibitors were really resistantto that change and it took some years to adapt it.Although everything points the conversion form analogical to digital exhibition isinevitable, is important to think in the economic part: “The cost of converting cinemasfrom celluloid to digital projection is high” (Allen, 2009:68). While “a motion-pictureprojector costs on average $50,000 and last 25 years (…), a theatrical digital cinemaprojector, however, costs $150,000 and works with a server that could be madeobsolete at any time by the ever-advancing computer technologies” (McKernan,2005:189). In addition, “there are probably at least 100,000 film projectors in theatresworldwide. They work. So why change anything?” According to McKernan “prettymuch for the same reasons that vinyl long-playing phonograph records were replacedby digital compact discs” (2005:161). This is an interesting theory if we have in mindthat CD sales are dramatically dropping, while vinyl’s sales are recently rising up.   6  
  9. 9. Beside some artist preference, the beauty, and texture of 35mm reels, digitalprojection offers better image quality as well as the mentioned cost savings, but thereis a third main characteristic, digital projection opens up the market programming notjust movies but “live or recorded HD of sporting events, rock concerts, operas, or anyother program material people enjoy seeing on the larger-than-life dimensions ofcommercial cinema screens” (McKernan, 2005:191).But the big question is, does the establishment of digital exhibition mean the end ofcelluloid? Actually, “if all cinemas were to operate with digital projectors overnight,actual movie print would become obsolete” (Angus Finney, 2010:90) but it does notnecessary mean its end. Film is the “only truly global imaging standard” and it worksbecause “it’s a proven, mature medium” difficult to replace (McKernan, 2005:161).However, the “film’s viability (…) doesn’t mean the death of digital either”(McKernan 2005:66-67). Everything points that digital and analogical exhibition willcoexist somehow; even if every commercial theatre converts their projectors to digitalones, “there’s more than a century’s worth of film content in the world’s archives, avital part of our modern cultural heritage” that have not been digitalized yet and theywill probably do not do it, these reels will keep showed in special theatres,filmoteques or museums.Cinema is experiencing some relevant ages of convergence where old and newmodels, digital and analogical, are forced to live together: “Cinema did not killtheatre. Television did not kill radio. Each old medium was forced to coexist with theemerging media. That’s why convergence seems more plausible as a way ofunderstanding the past several decades of media change than the old digital revolutionparadigm was” (Henry Jenkins, 2006:14). This convergence is explained in thefollowing chapters exploring the new models of financing and distributionaudiovisual content.   7  
  10. 10. 2. Welcome to the “prosumer” ageTraditionally, if a filmmaker wanted to make a movie there were two ways of raisingfunds, the first one was asking public administrations and the second one was askingprivate companies. Thanks to the Internet now there is a third way: asking regularpeople. This is what is called “crowdfunding”; a concept related to previous termslike crowdsourcing and 2.0 technologies. Like social media and online communities,crowdfunding has grown so quick in just about a couple of years that currently is ineverybody’s lips. The music industry has some previous successful cases ofcrowdfunding mainly generated by their fan community, like the British rock bandMarillion case that obtained funds to produce its 1997 tour thanks to its fans;however, until the launching of the American crowdfunding platform Kickstarter in2009 it was almost an unexplored model in the cinema industry. Its novelty and itschanging potential make this chapter an interpretation based on the current years’experience about the crowdfunding future and its influence in the traditional ways tofinance cinema.Crowdfunding is not just a new way of finding funds, is a new way of communicationbetween creators and their public. The idea of asking funds to friends and family inorder to produce a creative project is quite old, but the new technologies allowscreators driving this idea to wider circles in a more direct and effective way. Thecrowdfunding model was born a couple of years ago in the United States where isworking very well because in this country the State does not support culture projects;private investors support them. However, in Spain like in the rest of Europe cinema ismostly finance by public funds but these funds have been reduced and banks almostdo not give loans for creative projects because of the financial crisis. This factexplains why the neoliberalism mantra “do it yourself” has penetrated in the Spanishcreative community finding in crowdfunding the perfect alternative to traditionalfinance models.Crowdfunding is based on the direct interaction between creators and users since thebirth of the projects, something unthinkable in the traditional film industry wherecompanies are just in between the artist and his/her public. Audience is asking for   8  
  11. 11. horizontal structures where they can be part of the production in a more direct way,like in the crowdfunding model. Users also demand content in a different way, it isthe media convergence era that does not only affects on user demand, filmmakers also“want to develop relationships with their audiences, whether this is linked toinvolving them in the filmmaking process, mobilizing world of mouth to generatepublicity for the film or in mobilizing around issues” (Finney, 2010:16). QuotingKerrigan, “the online environment allows for such social networks to be more fluidand membership is less tied to offline social interaction” (2010:117). Crowdfunding isa collaborative way of production that permits creators to test their project in a wideraudience; if these projects do not success they can directly ask their audience in orderto improve their original ideas, is a way to involve people in their creation’s processwhile creators receive their feedback.During three years, the Catalonian artist collective Compartir Dòna Gustet –theEnglish translation would be “Sharing is a pleasure”- has been exploring the“parallelism and connexions between the popular ways of distribution before theestablishment of culture industry and the current digital ways of distribution via theInternet, discovering that both are decentralize ways of production”, affirms JoaquimGuionavart, member of the collective (See Appendix A). The novelty of thecrowdfunding phenomenon and the interest generated for the creative communitymade this collective to organize in February and April 2011 the First CrowdfundingFestival. There, they brought together all the Spanish crowdfunding platforms andthose creators who were producing a crowdfunding project like the feature film TheCosmonaut, the documentary No-Res, and the project Arròs Movie, produced by thiscollective. “When we organized the Festival we realized it was such a newphenomenon that none of the projects were finished yet and the platforms werelaunched just some months ago”, affirms Guinovart (See Appendix A).During the days the Festival took place in Barcelona and Madrid the collective wrotea list of conclusions uploaded in its website where they said, “thanks to theestablishment of new technologies we can recover the popular culture, we have thechance to create a more horizontal way of distributing culture”. In addition, theyexplained, “from the point of view of the market all of us are consumers but we are   9  
  12. 12. also creating another reality that gives profits too”. This is the “prosumer” (Kerrigan,2010) concept, the death of the passive audience that just consumed what the industrygave it, we live in an era where “the lines between the producer and consumer arebecoming blurred”, (Finola Kerrigan, 2010:193); now consumers are active, theycreate, produce, and share content.Crowdfunding is also a great shuttle for new creators that just need some thousandseuro to develops their first projects or maybe to complete the finance they alreadyhave. It is also a great marketing campaign because creators can promote theirprojects before they are finished. Another significant change that this model brings isthat historically producers were people who invested big amounts of money but nowanyone could be part of a film production. Following the crowdfunding’s ideology,everyone who supports a project receives something back. These rewards are usuallyrelated to the project and vary depending on the amount of money the backer hasinvested. The most common examples are DVD copies, including the backers’ nameson the credits, merchandising products, and premiere tickets.Although there is not an only crowdfunding model, I have detected three but thenumber could increase in the following years together with the establishment of thisphenomenon. The three models are: direct crowdfunding, crowdfunding platforms,and open crowdfunding.We call direct crowdfunding to a model where a person or an organization look forfunds directly through his/her own website. This is the case of The Cosmonaut, apioneer movie not just in Spain but globally. In 2009 The Cosmonaut’s team, headedby its director Nicolás Alcalá, changed its original idea of producing a traditionalshort film to go further and create a transmedia project. That year they launched TheCosmonaut website announcing the project as a “sci-fi movie that uses crowdfundingand creative commons licenses. It will be distributed through the internet, DVD, TVand cinema at the same time, creating an experience”. Three years of work make TheCosmonaut an innovative project that has built a new cinema business model pavingthe way to new creators. It is also one of the most successful crowdfunding cases aswell as the best example of how hard and difficult is to produce a movie beyond the   10  
  13. 13. industry. When they launched the project there was not any crowdfunding platformyet in Spain so they created their own campaign through their website being thepioneers of the direct crowdfunding in Spain. In May 2011 they run out of money forthe movie shooting, at that point two of the Spanish crowdfunding platforms werealready created so they launched the Save the Cosmonaut campaign via a mix system:direct crowdfunding and via one of the platform. In this campaign they asked for€40,000, in about a month they raised more than €100,000 (See Appendix B).Following the digital open culture’s ideology, The Cosmonaut project bets ontransparency; its financial plan can be download from its website by everyone (SeeAppendix C), as well as follow its blog where Alcalá explains these and other topicsrelated to the filmmaking process. However, when users watch The Cosmonaut’spromotional videos they can think the movie is totally finance by crowdfunding but isa hybrid finance model composed by public and private funds together withcrowdfunding. Their aim was achieving the 6% of its €860.000 budget viacrowdfunding, instead of it they have raised the 14%, beating their initially goal (SeeAppendix B). Since its early beginning, The Cosmonaut has been a very popularproject but it does not matter how low budget a production is; making movies is stilltoo expensive to be financed just by the audience.The Cosmonaut introduced new concepts about film business models, something verybrave and wild especially in a country like Spain where most of the industry dependson public funds. In spite of it, the project was really popular receiving support fromimportant Spanish filmmakers like Nacho Vigalando, Alex de la Iglesia (ex directorof the Spanish Cinema Academy) as well as the online community and the traditionalmedia. Another reason why this project has been so popular is because it hasintroduced the idea that everyone could become a film producer. From €2 on anyonecould participate in the filmmaker process, being part of the experience. QuotingKerrigan: “alongside the harnessing of social media by established mediaorganisations, the digital natives are developing filmmaking/marketing practiceswhich are appropriate for the digital age” (2010:209). Some of these practices arefinancing projects by crowdfunding, creating transmedia projects instead oftraditional films, and using the creative commons licences; three concepts that relate   11  
  14. 14. each other and are essential to understand the current changes in cinema industry, itsmodels, and the consumer’s habits. Another thing that makes The Cosmonautdifferent from other crowdfunding projects is that once the movie is made –currentlyis in the postproduction stage and will be released in 2012-, the team is willing toupload the whole footage to a server where everyone could download the material towatch, copy and remix it observing the chosen creative commons licence.Before going deeper into the crowdfunding models is important to define whattransmedia and the creative commons are. Transmedia is known as the multi-platformstorytelling. In other words, the creator uses more than one media (in cinema thetraditional medium is the film) in order to tell and show their project, inviting theaudience to turn into active participants. “To fully experience any fictional world,consumers must assume the role of hunters and gatherers, chasing down bits of thestory across media channels, comparing notes with each other via online discussiongroups, and collaboration to ensure that everyone who invest time and effort willcome away with a richer entertainment experience” (Jenkins, 2006:21). Some peoplesay the transmedia storytelling’s father was Orson Welles because of the War of theWorlds (1938) radio show. A more recent and well known example is the trilogy TheMatrix (1999), famous by the movies but the story also inspired a Japanese series ofanimation videos called Animatrix (2003), and the video game Enter the Matrix(2003), just to name some examples. According to Jenkins, “if Casablancaexemplifies the classical cult movie, one might see The Matrix as emblematic of thecult movie in convergence culture” (2006:100).Creative Commons (CC) is a nonprofit organization founded in 2001 in the UnitedStates in order to open creativity licenses to the net. Actually there are six CC licencesthat go from the most restrictive traditional copyright to the most open one, thecopyleft. In any case the author does not lose the intellectual property of his/her work.Depending on the kind of CC licence the creator has chosen, he/she allows or doesnot allow users to copy, distribute and/or mix his/her work, always with the conditionof quoting the author. “The CC was born as an alternative to the traditional copyrightrestrictive structure and its licences can be applied in any kind of format, not just indigital works”, affirms Ignasi Labastida from Creative Commons Spain (See   12  
  15. 15. Appendix D). This is the reason why currently there are some examples of CDs,books or even feature films licensed by CC.Previous to The Cosmonaut, the British documentary The Age of Stupid (2009),directed by Franny Armstrong was funded by crowdfunding. The movie was filmedwith a £800.000 budget obtained by private investors and donations from £500 to£35,000 (See Appendix E). This is a different way of understanding crowdfundingcloser to the traditional producer’s body because in this case producers whereinvestors who will obtain a proportional amount of money depending on the movie’sprofits. The Cosmonaut included this model too but just in contributions higher than€1,000. The Age of Stupid and The Cosmonaut are different crowdfunding modelsbecause the first one was focused on big donations while the second one also gave thechance to a wider audience to become producers and being part of the filmmakingprocess just from €2.These are just two globally successful examples of direct crowdfunding but there willbe more in the future. During the 2011 some well-known filmmakers like KevinSmith and David Lynch have already discussed tin their blogs and different onlinemedia, the idea of using crowdfunding to produce some of their personal projects.However, it is still too early to know if they will definitely do it.The second crowdfunding model is the most extended and popular one: thecrowdfunding platform. Here, the filmmaker who wants to raise funds to producehis/her project has to upload a video where he/she explains what is the project abouttogether with a synopsis. As well as in the direct crowdfunding, the filmmaker needsto launch a campaign via the social networks in order to develop a community thateconomically support him/her.Talking about pioneer platforms, the first one was the American IndieGoGo launchedin 2008. According to its website, they decided to create this site because “there are somany people in this world, with great ideas and big dreams, who are looking for theopportunity to get funding. IndieGoGo offers anyone with an idea - creative, cause-   13  
  16. 16. related, or entrepreneurial - the tools to effectively build a campaign and raisemoney”. Following the same philosophy, Kickstarter was launched in 2009 becomingthe most common reference of crowdfunding platforms. According to its website“Kickstarter is a way to break beyond the traditional methods — loans, investment,industry deals, grants — to discover that we can offer each other value throughcreation without a middleman dictating the product and terms.” These pioneers haveinfluenced all the European platforms like the British Sponsume and the SpanishVerkami and Lánzanos. A successful example of film finance by a crowdfundingplatform is the American filmmaker Gary Hustwit case who used Kickstarter to partlyfinance Urbanized (2011). This documentary completes the Design Film Trilogycomposed by Helvetica (2007), Objectified (2009), and Urbanized (2011). Hustwitasked his community via Kickstarter for $85,000. His goal was greatly beaten the23rd March of 2011 when he obtained $118,505 from 1,814 backers. The movie willbe released on cinemas in 2012.In Spain this phenomenon is pretty new having only a year. Following the mentionedAmerican platforms models, the designer Carlos Hervás, together with the softwareengineers Ignacio Arriaga and Rafael Cabanillas, founded in December 2010 the firstSpanish crowdfunding platform: Lánzanos. One of the reasons they launched thisproject is because they liked the Kickstarter philosophy but this platform just admittedAmerican projects so they imported its model to Spain. In the beginning theLánzanos’ team were not very optimistic about the platform success because of thefinancial crisis and the way the Spanish society works, very different from the Anglo-Saxon one where this model has succeed; but they followed the entrepreneur’sideology affirming, “if you don’t fight for producing your own ideas many of themwill never come to light” (See Appendix F).It could be though that these kind of projects linked with new technologies, socialnetworks, and all the 2.0 tools are always developed by “digital natives”, defined asthose ones who were “born after 1980, when social digital technologies, such asUsenet and bulletin board systems came online” (Palfrey and Gasser, 2008:1), but thecrowdfunding platform Verkami is an example that this is not always like that. JoanSalas is a biologist in his fifties who founded Verkami in 2011 together with his two   14  
  17. 17. sons Jonàs (28), a Doctor of Physics, and Adrià (23), graduated in Art History. This isthe platform I have chosen to upload my project; my experience is documented in themeta-documentary that complements this written thesis. Following the Kickstarter“all or nothing” model, in Verkami and Lánzanos if a project does not reach itsfunding goal before the time runs out –the number of days are determined by thecreator and the platform- the filmmaker does not receive anything. Thanks to it theyassure the filmmaker makes an effort to build a community, communicate with his/heraudience, and keep their community’s rewards. For every successes project, theseplatforms get the 5% of its funds.The founders of these two platforms agree that crowdfunding is not a fleeting trendbut a natural response to new technologies and media globalization, a way ofdemocratize culture and finance projects without intermediaries. It is also a greatmarketing campaign that allows creators to build a community and create expectationbefore their work is finished (See Appendix F, G, H, I).The social network Goteo, launched in November 2011, is an instance of the thirdcrowdfunding model: the open one. Its co-founder Olivier Schulbaum, defines it as“the first international collective finance social network focused in open DNAprojects” (See Appendix J). When Schulbaum talks about “open DNA” it means thatany project uploaded in this platform needs to give something back to the community,“something they can use in their own projects” (See Appendix J); these collectivereturns could be open sources, shared knowledge, resources or derived services. Apartfrom some differences, Goteo works in a similar way to the existing crowdfundingplatforms. When the project is uploaded in the platform its creator has 40 days toobtain his/her finance goal based on the “all or nothing” idea. Once the goal isreached, the creator has 40 days more to achieve more funds further than the project’sbasic needs. The main differences between Goteo and others crowdfunding platformsare two. The first one is it is not a company but a foundation that has received publicand private funds to develop the network and organize workshops in different Spanishcities. “Collective finance through open DNA is compatible to other ways offinancing”, affirms Schulbaum, “if we look for a sustainable system we need to createmixed models of public and private funds together with the civil society” (SeeAppendix I). The second difference is all the projects uploaded in Goteo need to be   15  
  18. 18. licensed by an open licence like creative commons that allows the copy, distribution,modification and/or exploitation of part or the whole creation. In the other platformscreators have the chance to apply these measures but is not a requirement.Following the experience of those creators I had the chance to speak with as well asmy own experience, everything points that crowdfunding is a great complement totraditional finance models but not a solution “for all the culture financing problems”,as Joan Sala, founder of Verkami, said (See Appendix I). It is proved the model worksin small production but is very difficult to finance large productions just by theaudience. A very low budget movie can be made in Spain by €1,000,000, a ridiculousfigure if we compare it with the American $40,000,000 low budgets films. In spite ofit, achieving a million euro just by users is almost impossible. The Cosmonaut is theparadigm of a successful crowdfunding case, and it did just achieve the 14% of its€860,000 budget by this model. The transmedia project Arròs Movie is anotherexample of it, it achieved €8,600 via the crowdfunding platform Verkami but thisproject has been produced thanks to the €24,000 the Generalitat de Catalunya (TheGovernment of Catalonia) gave to the collective Compartir Dòna Gustet (SeeAppendix A). Crowdfunding could be the solution to finance other ways of culturebut movies are still really expensive to make so filmmakers need from traditionalfinancing models if they want to keep producing their works.Even large production cannot be produced through the crowdfunding model. Thismodel great complement to traditional ones and thanks to it many small projects havethe chance to be produced. There might be some exceptions of all crowdfundingfinance movies in the future but just if the filmmaker is really popular and he/she hasa large amount of fans around the world, but most of the filmmakers are not globallyfamous. In spite of it, the strongest point of crowdfunding is not based on the fundsbut in the community building as it was previously explained.These significant changes in the ways of financing and producing cinema also affectson the distribution and exhibition traditional system; the Internet has created a newwindow and consumers have rapidly adapted to watch movies and any kind ofaudiovisual content via the Internet. However, audience and technology have worked   16  
  19. 19. faster than the industry and for years people have used to watch free content on thenet because there was not any legal platforms like the current successful onlinecinema platform Netflix. This phenomenon is explored in the following chapter.3. Is the Hollywood distribution system breaking up?Once the creator gets funds enough to produce his/her project –by means ofcrowdfunding, private or public funds-, what is the next step? How can he/shedistribute and exhibit the movie? Until some years ago, the Hollywood verticaldistribution system based on windows was the only way to do it. The arrival of thenew technologies and the current digital revolution is transforming this scenariooffering new ways of distribution and exhibition by means of the Internet; thesemodels are more horizontal, eliminating the gatekeepers between the filmmakers andthe audience. However, these new models are still in their early days and there aremany facts that prove they will not survive without the help of the Studios. For thisreason before focusing on the new distribution models is important to show whyHollywood controls the global film market and how the window system works.For over a century, the film industry “has been dominated by the Hollywood majors”(Kerrigan, 2010:18), the reason why this oligopoly is still controlling the film industryis because its “economic characteristics” (Finney, 2010:6) are based on an effectivebusiness model. During its early days –the end of 19th century and the beginning ofthe 20th century-, cinema was based in Europe, especially in France and Italy.However, the World War I (1914-1918) changed the cinema scenario to Los Angeles.It was in 1920 when Hollywood and the studio system were formed. From then on,things have not changed significantly: “The industry consists pretty much of the samesix firms for ninety years, minus MGM and RKO, plus Disney, all in close proximityin one metropolitan area” and these majors still control the global film market. While“on 1920, Hollywood had over 70 percent of world film revenues, in 2005, that sharewas still above 70 percent” (Eli Noam, 2010:60). These figures contrast with theEuropean cinema ones that show “outside their national market, draw in otherEuropean countries only 6.3 percent of audiences, and worldwide less than 5 percent”(Noam, 2010:61).   17  
  20. 20. It is usually said that the “integrity of European filmmakers” limits their popularity“in contrast to Hollywood’s pandering” but the reality is “most European (orJapanese, Korean, Indian or Chinese) films are not artsy at all” (Noam, 2010:62), theyjust follow the Hollywood methods of productions with two big differences: thebudget is significantly lower and the producer do not have the pressure of recoveringall the money invested because it mostly comes from public organisms. Even if weassume European cinema is more pure, more artistic, and more creative than theAmerican one, “a century of history should teach us some lessons (…) artisticcreativity is not enough” (Noam, 2010:67) to build a powerful business model, amodel that the European Film Industry does not have yet. Jean-Luc Godard said,“Who is the enemy? The audience!” (Bergfelder, 2010:62), in relation that audienceprefer Hollywood blockbuster than art-house cinema. The consumers’ preferences areusually influenced by the Studios’ marketing campaigns. The Majors invest millionsto promote their products because “each year, about 200 major films are beingproduced” and each of these movies “cost about $70 million to $100 million to make”(Noam, 2010:64); investing on marketing is a way of making them globallyprofitable. Even though, “film projects are enormously risky” and around the “eightypercent of films, even allowing for the elusiveness of the concept of profits in theindustry, lose money” (Noam, 2010:63) so the industry lives thanks to that 20% hitsthat are globally exploited. Digital distribution gives a second chance to the remaining80%. This point is detailed some paragraphs below.Distribution is probably the most important stage in film industry; distributors decidewhich movie will be showed, when, where, how many weeks, and which will neverbe showed. Even the digital revolution is slowly changing the Hollywood verticalmodel offering digital alternatives; it is still the dominant system. The industry hasalways been characterized for the conservativeness of the Studios and its rigidstructured forms but why is the system like that? At the start of the last century, “filmindustry was initially less global” and it was not until the “development of the motionpicture, and the associated costs in production and marketing” when they felt the“need to expand to new markets”. When it happened, they developed the theatricalwindows system that “was the first to be invented for transmitting films”. This system   18  
  21. 21. understands movies like products, it makes the most of them assuring they do “notreleased onto the next form of media until the exploitation in its previous one hadbeen exhausted” (Finney, 2010:4). The Studios control everything, from royalties tofilm production, marketing, exploitation and of course, distribution: “The distributionphases start with cinema exhibition (viewed from Hollywood as theatrical ‘domestic’and ‘foreign’ windows) followed by home video and DVD, pay-TV, free-TV,syndication and possible video gaming and merchandising opportunities” (Finney,2010:10).In contrast to the window system, consumer demand to watch audiovisual content in adifferent way. Kerrigan argues that currently we live in “an on-demand world whereconsumers want to watch what they want when they want and the best route to this isthrough the Internet” (2010:197). Thanks to them, “films are distributed at differentstages of the old value chain, and move on from there” (Finney, 2010:7) to video-on-demand, video up-loading, streaming platforms (legal and illegal ones), cell phonesand so on. A digital exploitation value chain just with two windows -theatricallyrelease and video-on-demand- would simplify the current value chain and satisfy theusers’ demand: “All previous rights and windows, including DVD, home video, pay-TV, free-TV, etc., are likely to be submerged into one set of exploitation rights –VOD through the Internet, which in turn will be downloadable within a householdand a television screen, etc.” (Finney, 2010:16). Even we are in a moment whereeverything is possible, the Studios will not allow this dramatic change so soon, andthey will do anything to keep the current value chain because it still gives a lot ofincomes to the industry. Audience, creators, and producers are the ones who areexperiencing with these digital models but everything points that it is too early toapply the digital value chain as the only option because is not economicallysustainable yet.If “one of the reasons behind film piracy is lack of access to a wide range of filmthrough the conventional distribution routes” (Kerrigan, 2010:197), why the Studiosdo not develop legal alternatives to fight against it? The $24bn a year of DVDincomes is a powerful reason. According to Finney, majors just obtain $10bn a year atthe box office so it does not matter if the DVD business “is dropping by 3 per cent a   19  
  22. 22. year” and “the only growth area is the net (…) any damage to the DVD windowcreates fear and hostility in the risk-adverse Studios ecology” (2010:124). If thedigital distribution turns more profitable tan the DVD business, the industry willtotally adapt to it but until it happens they will keep clinging to the traditionalbusiness model.Even most of the digital distribution models are not highly profitable yet there aresome examples of successful online platforms. The most remarkable one is Netflix, anAmerican platform formed in 1997 based on the traditional pay-per-rental model. Itintroduced the monthly flat rate concept where consumers can legally watch unlimitedmovies in their computer or in their TV. In its early days Netflix was just an onlinevideo shop where consumers chosen a movie and that DVD was sent by mail, aservice that is still working in the USA. Currently the company has more than100,000 tiles and about 25 million subscribers in USA, Canada and Latin America(Fernando Barciela, 2011:1). Netflix buys the screening royalties to the Studios but italso bets on independent movies investing on their digital distributions. Thiscombination of hits and indie films makes this company the paradigm of the “long tailbusiness”, named like that in 2004 by the Wired Magazine journalist Chris Anderson.Anderson assures that there are millions of niche markets that have not been coveredyet because the 20th century was the hits era but “the 21st will be equally aboutmisses”; these misses are the alternative to the mass market’s profitable products thatare just the “20 percent of major studio films” (Anderson, 2004:2). This is a radicalway of understanding entertainment economy, far away “from today’s mass market”(2004:1). “The future of entertainment is in the millions of niche markets” (Anderson,2004:1) and companies like Netflix, Apple or Amazon “have discovered that themisses usually make money, too” (Anderson, 2004:). The growth of the Netflix’sannual turnover from $1,205 million in 2007 to $2,162 million in 2010 (Barciela,2011:1) is a good example of it. Netflix “has made a good business out of what’sunprofitable fare in movie theatres and video rental shops because it can aggregatedispersed audiences”, it follows the number one Long Tail Business rule: “makeeverything available” (Anderson, 2004:3). Digital cinema platforms need to “combineenough nonhits on the Long Tail” (Anderson, 2004:3) because just offering hits does   20  
  23. 23. not work in digital distribution; it could be the reason why Movielink, the videostreaming platform launched in 2002 by the Studios, did not succeed: its content wastoo limited. Platforms need to have a wide catalogue, big enough to “changeconsumer behaviour, to become a real force in the entertainment economy”(Anderson, 2004:5); otherwise they will not be a strong alternative to traditionaldistribution or illegal digital models.The arrival of Netflix to Spain could be a legal solution to fight against the high ratesof piracy in this country because nowadays “you can not talk about illegal offer ifthere is not legal offer”, pointed the filmmaker Alex de la Iglesia (Free/Libre CultureForum, 2011). In the summer 2011, Netflix announced their expansion to theEuropean market in January 2012 being Spain the first country to launch the platform.However, the dropping figures of subscribers in the USA based on the increase of itsmonthly flat rate -in July 2011 they announced its $9,99 would cost $15,98 (Barciela,2011:2)- have forced Netflix to change that business strategy. The high prices of theSpanish movies royalties together with the piracy it also makes Spain a difficultmarket to implement digital distribution alternatives; Rafael Sánchez, BusinessDirector of the online cinema platform Filmotech, points that “just the 1% of theonline cinema is watched legally in Spain” (Barciela, 2011:1).In fact, there are some Spanish legal alternatives, but really limited, and any of themfollow the long tail model. The most relevant ones are Filmin, Fimotech, Wuaki TVand Youzee. Together with the piracy problem, the brutal economic crisis makesthings even harder to initiatives like these ones. Jaume Ripoll, Editorial Director ofFilmin, goes further affirming that one of the biggest problems linked to the Internetconsume is the lack of patience and overabundance of products: “Users do not watchmovies anymore they devour them”, he argues, “people always want to watch thelatest movie instead of thinking that every movie they have not watched yet isactually a new movie” (See Appendix K).In 2006 the main independent Spanish film companies funded Filmin focused on theniche market of art-house and indie cinema lovers. Following this idea, they are notfulfilling the hit content needed to achieve the successful long tail business; Filmin is   21  
  24. 24. a quality distribution platform but it is just focused in a few users, actually they havejust reached about 1,000 subscribers (Juan Carlos Tous cited in Barciela, 2011:1). Partof the Filmin’s catalogue of 1,700 films and 400 short films is composed of moviesthat have not been theatrically showed or their DVDs have not been launched inSpain: “The 80% of movies showed on festivals are not distributed in Spain”,explains Ripoll, “now, some of them can be watched on the Internet” (See AppendixK). The pay per view model, the most common one in the European streamingplatforms, is available too but like Netflix, Filmin bet on the flat rate. It wasintroduced in 2010 at the same time as the well-known online music player Spotify.The price of the Filmin’s flat rate is €15 per month (€10 per month if the usersubscribes its services for three or more moths), and pay per view prices goes from€0,95 to €2,95. Users can watch unlimited movies on their computer, mobile, tabletsor TV. This is an important fact if we have in mind that in the Netflix case, “the 89%of their users watch movies on TV” instead of computers (Barciela, 2011:2).Filmotech is another Spanish online platform launched in 2007; it is focused in theSpanish cinema closing even more its market to a small percentage of viewers. Theyhave a catalogue of 1,400 movies and they apply the pay per view system where userspay €1,42 per streaming and movies can just be watched on computers. Otherexample is Wauki TV, a new online video shop launched in July 2011 whichcatalogue includes about 1,000 blockbuster movies. The support of the majors Sonyand Filmax has given the company some popularity, from July on they have achieved10,000 users and 15,000 downloads (Barciela, 2011:1). Like Filmotech they appliedthe pay per view system, prices go from €1,99 to €3,88, but in this case movies canjust be watched in LG and Samsung TVs. Like the other two examples, Wuaki TVaddresses to a specific audience, in this case they have forgot about the “misses”(Anderson, 2004), because they just show commercial films. The fourth Spanishexample would be Youzee, an online platform still in its beta period that has beenlaunched to the press and to part of the online community in November 2011; it willbe open to users in 2012. It has the support of Yelmo Cineplex, a powerful Spanishmultiplex cinema company that has always bet on digital exhibition. It was the firstcinema company in Spain that has changed all its theatres’ analogical projectors todigital ones; this change started in August 2010 and has finished in August 2011 (See   22  
  25. 25. Appendix L). It is still too early to predict the success of this platform but its €6,99monthly flat rate in its varied catalogue are good starting points. Another alternative isiTunes, from September 2010 it allows Spanish users to buy and/or rent movies viaiTunes Store but the movies can just be watched in an Apple device.Digital distribution also renews the film industry economics developing new kinds ofrelationships between filmmakers and users that open the media to a new scenario;“whereas old Hollywood focused on cinema, the new media conglomerates havecontrolling interest across the entire entertainment industry” (Jenkins, 2006:16). Thepower of active users is a relevant key to understand these changes that are “linkedwith a renewed focus on commercial issues which is not about amassing greatfortunes and protecting intellectual property, but about creating sustainablefilmmaking, is succeeding due to its authentic nature” (Kerrigan, 2010:208-209).4. The end of gatekeepers… But not yetThe digital revolution demands a wild and dramatic transformation of the wholeculture industry. Traditionally, the European and American cinema industries haveworked following the vertical Hollywood system but the Internet has opened thefilmmaking process to new horizontal models beyond the established cinema industry.These models are linked with the birth of the web 2.0 in 2004 that has opened up theInternet to users’ participation in a more dynamic way giving them the power tointeract, share, and comment any digital content. Consumers have adapted very fast tothis participatory schedule and they demand it in any media as well as in filmproductions. The birth of the web 2.0 is the birth of the prosumers age.If the 20th century was the age where a passive public waited for finished products toconsume them, the 21st century is the age of active users that want to get involved inthe creative process. New media have given power to those users that have turned toan active audience, this horizontal ways of production beyond the industry are veryattractive to prosumers because they make easier their interaction to the filmmakingprocess. The new financing, production, and distribution models allow this   23  
  26. 26. communication. But this revolution is not based just on the change of consumers’behaviour but also on the way filmmakers produce cinema; new technologiesapproaches creators to their audience.Nowadays people prefer creating than consuming. I am part of these active prosumerscommunity that spends a lot of time producing, creating content, sharing it, andcommenting others users’ works. This is one of the reasons I produced a documentaryto complement this practice-based thesis but not the only one. I have previousexperience expressing impressions and ideas through the moving image; in addition,the idea of documenting my experience as a creator who has partly finance her projectby a crowdfunding platform totally seduced me; producing a meta-documentaryinstead of a conventional documentary has also allowed me to be directly part of theprocess and experience it.However, it was not just the prosumer need of producing why I made this movie;being this dissertation’s topic a phenomenon that is currently happening it made senseto get involved into the movement further than just researching and studying it in thedistance. That is why during 20 days (from 1st to 21st of November 2011) I developeda crowdfunding campaign in the platform Verkami. Those days I launched apromoting campaign getting first-hand information about the new digital models, thisexperience allowed me to deepen into the crowdfunding movement making it arelevant knowledge for this thesis’ development.The documentary that complements this thesis is another product that will be showedin the Youtube and Vimeo channels, together with the thousands of hundreds videosuploaded every day. The current age has developed in users the need of producingcontent, we are happy creating and once the content is made we want to show it to thedigital world, it does not matter its quality, we have just made it because we enjoy thecreative process and now we have the tools and the technology to do it. Producingaudiovisual content demand a lot of time, it is a fact. All the weeks I have beenworking in the production of this documentary I have not been consuming theindustry’s products, it is the same for all of these creators who spend some timeproducing their own work. This is a dangerous fact for the culture and entertainment   24  
  27. 27. industry that has seen how their profits have dramatically dropped in the last yearsbecause of this behaviour caused by the digital age. Prosumers are not only interestedin the industry products, but also in that content produced beyond it.Crowdfunding is a financing model but is not just based on funds, but also in thedirect relation between creators and users. During my campaign I discovered thatcrowdfunding is in fact a great tool to build a supportive community. I was glad todiscover that part of the funds raised (I asked for €300 to go to Barcelona to collectmaterial for the documentary) came from unknown persons. From a total of 35patrons, I did not personally know six of them; it is quite a large number having inmind that those backers just watched the video I uploaded to the platform, read thesynopsis, and wanted to support the project. In the introductory video I also explainedthat anyone who would like to follow the documentary’s evolution could add me onFacebook and Twitter. During those days few persons I did not know contacted mevia these social networks to check the project’s evolution. With the collected funds (in20 days I got €570) I travelled to Barcelona where I had the chance to meet some ofthese people who have supported me, bringing the community building to a differentlevel of interaction. This fact was very exciting and unexpected, it made me thinkcrowdfunding actually works as an alternative way to finance low budget projects likemine as well as a proper way to build a community; it also made me realize people areinterested in knowing more about how the culture industry is changing because of thedigital revolution and supporting my project was a way of understanding thesechanges.There is a need of studying these changes because they are being produced right nowand this phenomenon is happening that fast that is difficult to cover all of it. Theindustry is slowly adapting to them but technology and users go faster creatingimportant economic imbalances that will be balanced with the pass of the years. It issaid that creators and audience are more willing to experimentation than the industry,usually characterized by its conservatives and the desire of profitable products. Itexplains why the independent producers and creators are the ones that mostlyexperiment with these new models of production, financing, distribution and   25  
  28. 28. exhibition; even sometimes they are part of the industry they do not have so much toloose if the system pulls down, so they can experiment with innovation.However, these models are so new that they need to coexist with the traditional onesin order to grow and become sustainable; at this point they are not strong enough tobreak down decades of an established cinema business model that in spite of thecurrent economical losses, still works. Even they are not still significant ways ofcollecting money; amateurs and new creators usually use these horizontal ways ofproduction and distribution because they are proper ways to promote their projects.They are in fact great shuttle to new creators, in the case of crowdfunding they canobtain some funds, and once the project is made they can show it via any of the digitaldistribution system like the Youtube or Vimeo channels, available for anyone withoutany cost. But if these models give something valuable to creators is the chance ofbuilding a community. There will always be some creators that do not want to be incontact with their audience, and we should respect it, but most of them wish thisdirect interaction without gatekeepers.These new models are valuable tools and the industry is slowly opening to thembecause it cannot fight against the inevitable fact that now users are producing contentand they want to consume cinema in a different way than some years ago. Even thetraditional business model is still working and giving profits, the industry needs toinvest in digital models if it wants to keep achieving significant incomes in the future.If the Studios do not invest in the new models there might be a bigger gap betweenthe Hollywood blockbusters and the rest of film productions that will be producedbeyond the industry. It could be the beginning of a new business model establishedbeyond the traditional one; but it will not happen after years of hard work and theinvestment of big amount of money. Even the growth and establishment of a newbusiness model seems very possible in the following years, it will not break down theHollywood predominance, the industry will keep producing high budget movies thatwill keep being globally profitable. Hollywood movies will still predominate in thebox office, it does not matter if it is a theatrical or a digital one, it is almost impossibleto totally break down a whole industry that has been developing a strong and effectivebusiness model for decades.   26  
  29. 29. We are in a convergence period where old and mew media coexist, same for old andnew business models. This period of transition makes difficult to talk about the futurewithout the risk of being wrong, however, I dare to say that in the following years, thedigital will completely predominate to analogical in every scenario. In addition, thesehorizontal models will fuse in a more dramatic way with the traditional ones, creatingeffective hybrids models that will be adopted by the industry. To conclude, theestablishment of the digital models will not be the end of Hollywood but it is anopportunity to build a new business model more horizontal and with fewergatekeepers that could also be as powerful as the traditional one.   27  
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  31. 31. Compartir Dòna Gustet. [Online] Available at:[Accessed: 20 September 2011]. (In Spanish).¡Copiad, malditos! Elegant Mob Films, dir. Stépahne M. Grueso, 2011. (In Spanish).Coonan, C. (2007) ‘Greenaway announces the death of cinema – and blames theremote-control zapper’ [www] (03/10/11; 12:30).Currah, A. (2006) ‘Hollywood versus the Internet: the media and the entertainmentindustries in a digital and networked economy’ [www] (21/01/11; 11:45).Deamo, R. Interviewed by: Cebas, B. (17th November 2011, Barcelona).De Vicente, J. L. 2010. [José Luis de Vicente in #CriticalMasss: CollectiveIntelligence] José Luis de Vicente en #MasaCritica: Inteligencia Colectiva [Online]Available at: [Accessed: 19 October 2011]. (In Spanish).De Vicente, J. L. 2010. [Clara Piazuelo in #CriticalMass: Mass Culture] ClaraPiazuelo en #MasaCritica: Cultura de Masas [Online] Available at: [Accessed: 19 October 2011]. (In Spanish).Easymaker. 2010. [Interview to Manuel Castells in CNN+] Entrevista a ManuelCastelles en CNN+ [Online]. Available at: [Accessed: 24 June 2011]. (InSpanish).Elegant mob films. 2011. [¡Copiad, malditos! Interview to Fernando Évole fromYelmo Multiscreen Cinema] ¡Copiad, malditos! Fernando Évole, Yelmo Multicines,   29  
  32. 32. entrevista [Online]. Available at: [Accessed: 25November 21]. (In Spanish).Elegant mob films. 2011. [¡Copiad, malditos! Interview to Simone Bose from EMIMusic Iberia] ¡Copiad, malditos! Simone Bose, EMI, entrevista [Online]. Availableat: [Accessed: 25 November 21). (In Spanish).Evans, M. H. (2011) ‘The Power of Crowdsourcing’ [www] (24/06/11; 10:28).Finney, A. (2010) The international film business, a market guide beyond Hollywood.London, New York: Routledge.Free/Libre Culture Forum. 2011. Networks for a R-evolution, 27–30 October 2011.Barcelona.Forbes, J. and Street, S. (2000). European Cinema. An Introduction. New York:Palgrave.Goteo. [Online] Available at: [Accessed: 1 November2011].Guinovart, J. Interviewed by: Cebas, B. (17th November 2011, Barcelona).Hanson, M. (2004), The end of celluloid. Film futures in the digital age. Mies, Hove:RotoVision SA.Helvetica. Veer and Swiss Dots, dir. Gary Hustwit, 2007.Hervás, C. Interviewed by: Cebas, B. (22nd September 2011, Skype interview).   30  
  33. 33. Howe, J. (2011) ‘The Rise of Crowdsourcing’ [www] (24/06/11; 11:10).Hustwit, G. 2011. Urbanized: A documentary film. Kickstarter [Online] 23 March2011. Available at: [Accessed: 25 July 201].IndieGoGo. [Online] Available at: [Accessed: 1August 2011].Jäckel, A. (2003) European Film Industries. London: British Film Institute.Jenkins, H. (2006) Convergence Cultures. Where old and new media collide. NewYork: New York University.Kaufman, A. (2011) ‘Sundance: Five ways to survive’ [www] (27/08/11; 16:03).Kerrigan, F. (2010) Film Marketing. Amsterdam, Boston, London:Elsevier/Butterworth-Heinemann.Kickstarter. 2011. [Online] Available at: [Accessed: 1August 2011].Labastida, I. Interviewed by: Cebas, B. (23rd November 2011, Skype interview).Lánzanos. [Online] Available at:[Accessed: 1 August 2011]. (In Spanish).   31  
  34. 34. Manovich, L. (2002) The Language of New Media. Cambridge, London: The MITPress.Manovich, L. (1999) ‘What is Digital Cinema?’ in P. Lunefeld (ed.) (1999) TheDigital Dialectic: new essays on new media. Cambridge: The MIT Press.McKernan, B. (2005) Digital Cinema: The revolution in cinematography,postproduction and distribution. New York: The McGraw-Hill Companies.Miller, T.; Govil, N.; McMurria, J. and Maxwell, R. (2001) Global Cinema. London:British Film Institute.Nevado, V. (2011) [RE: Yelmo contacts] ‘RE: Datos contacto_Yelmo’ [email] (04/12/11). (In Spanish).Noam, E. (2010) ‘Hollywood 2.0 how Internet distribution will affect the filmindustry’ in W. Russell Neuman (ed.) (2010) Media, technologies and society:theories of media evolution. University of Michigan Press.Objectified. Plexi Productions and Swiss Dots, dir. Gary Hustwit, 2009.On Board Diary. 2011. The Cosmonaut Movie Blog [Online] Available at: [Accessed: 1 August 2011].Palfrey, J. and Gasser, U. (2008) Born Digital. Understanding the first generation ofdigital natives. New York: Basic Books.Philips, D. and Young, P. (2001) Online Public Relations. London: Kogan Page.Ripoll, J. Interviewed by: Cebas, B. (23rd September and 18th November, Barcelona).   32  
  35. 35. Sala, Joan. Interviewed by: Cebas, B. (2nd September 2011, Skype interview).Sala, Jonàs. Interviewed by: Cebas, B. (17th November 2011, Barcelona).Schulbaum, O. Interviewed by: Cebas, B. (3rd November 2011, Madrid).The Age of Stupid. Spanner Films, dir. Franny Armstrong, 2009.The Cosmonaut [Online] Available at:[Accessed: 15 July 2011].The Man with a Camera. VUFKU, dir. Dziga Vertov, 1929.The Tulse Luper Suitcase. ABS Production, Delux Productions and Focusfilm Kft.,dir. Peter Greenaway, 2003.Turkle, S. (1995) Life on the screen. Identity in the age of the Internet. New York:Simon & Schuster Paperbacks.Verkami. 2010. [Online] Available at:[Accessed: 1 August 2011]Vincent, G. Interviewed by: Cebas, B. (13th October, 2011, London).Willis, H. (2005), New Digital Cinema. Reinventing the moving image. London:Wallflower Press.Zzzinc. 2011. #1 Crowdsourcing [Online] Available at:[Accessed: 19 October 2011]. (In Spanish).   33  
  36. 36. Zzzinc. 2011. #2 Crowdfunding [Online] Available at:[Accessed: 19 October 2011]. (In Spanish).   34  
  37. 37. AppendicesPlease, see below the interviews realized during the researching period, and the filesrelated to the case studies of the movies The Cosmonaut and The Age of Stupid.   35  
  38. 38. Appendix AInterview to Joaquim GuinovartMember of the collective Compartir Dóna Gustet17th November 2011, BarcelonaCompartir Dóna Gustet (Sharing is a pleasure) is an artist collective that investigatesthe popular culture in relationship to the digital one. They have produced the FirstCrowdfunding Festival and they are currently producing the transmedia project ArròsMovie (Rice Movie).Question (Q): When did you start to collaborate with Compartir Dóna Gustet andwhat is the collective’s ideology?Answer (A): I have been collaborating with Compartir Dóna Gustet since thebeginning of the collective in 2008. We knew each other quite well because we usedto build others artist collectives as well as a net label.The collective was born with the aim of investigating, dispreading, and producingMediterranean popular culture. Then, we found a parallelism between the popularways of distribution and the current ways of culture. We realized that the peer to peer(P2P) system was similar to the popular oral transmission. There was a connexionbetween the ways of distributing culture before the birth of the culture industry andthe Internet ones that are also decentralize, without any industry. We have beeninvestigating this phenomenon for three year.Our symbol is a paella pan because we consider it shares our ideology. The paella is acommunity food, nobody has the copyright of its recipe, everyone has a different wayof cooking it adapting and remixing it, and eating paella is a community event.   36  
  39. 39. People say the third year of a company is when it needs to gives some profits but weare a non-profit making entity so we though we were mature enough to produce a bigwork, in this case it was a transmedia film called Arròs Movie.We also have received some public funds to produce some events where we havemixed traditional music with DJs and a chef cooking paella, everything broadcasted instreaming. These are the kind of things the collective does.Q: Why does the collective use crowdfunding and free licences in thedevelopment of its works?A: We have previous experience in it because were worked in a net label where weproduced music licensed by free licences; we liked it so we wanted to keep it.Investigating new ways of culture production together with the idea of making amovie, we found a new financing model: crowdfunding. We were aware that otherprojects were using crowdfunding so we tried. We loved the idea of sharing ourproject to the public since the first day, allowing people to get involve.Q: What does crowdfunding mean for you?A: Crowdfunding is building project together with many people. Further thanfinancing, crowdfunding is a way of approaching the project to a collaborative way ofproduction. The most interesting part of crowdfunding is the chance of opening up theproject explaining and sharing it to the public; before, movies were not showed untilthey were theatrically released.   37  
  40. 40. Q: How do the new technologies contribute to the establishment of the newmodels?A: New technologies give power to crowdfunding. Before the Internet crowdfundingalready existed, Selling Christmas tickets were a way of crowdfunding very limited,now with the new technologies you open up to an unknown community and it hasmore power.Q: This year (2011) you have organized the First Crowdfunding Festival, howwas the experience?A: When we decided to use crowdfunding in our project we realized we also neededto explain what crowdfunding was because many people did not know it. To do thatwe organized a festival where we put together the Spanish crowdfunding platformswith those projects that were using it. Then, we realized it was something so new thatall the projects introduced in the festival like The Cosmonaut, No-Res, El Activista,Arròs Movie (our project) have not been finished their production yet. It was reallyeasy to organize because everyone was happy to explain what he or she was doing.Q: Is crowdfunding more effective in music than in cinema production?A: Cinema is more expensive and you need more time and money to produce it.When you produce a CD you already have the songs composed and you just need torecord them, you ask funds for it. On cinema is different because the process is longerso you need more money.Q: Arròs Movie is a transmedia project, what does it mean?A: Transmedia is when you build an idea’s project through different media likecinema, videogames, Internet series, parties with music gigs etc. We knew we wantedto explore every single production media in Arròs Movie, for example we have been   38  
  41. 41. uploading weekly videos called “Making-On” because is showed while the filming istalking care and not afterwards, like the traditional “Making Of”. Producing a moviein the traditional way was not interesting for us, during the 20th century people wereexcited producing cinema but today we have so many channels of distribution that welooked for something different.Q: Will the cinema industry be more interested in these transmedia products inthe future?A: From the industry side the changes are very slow; the changes usually come fromcreators and producers. We feel better and freer producing culture like that becausewe think is richer, the industry will move to this side in the future.Cinema is an old media; it has more than a hundred years old so these changes arenatural. From the users side not many people go to the movies, we consumeaudiovisual content in a different way than some years ago, we watch movies throughmobile, computer… When we watch a movie we like to smoke, eat, stand up, leaveand return… The exhibition model needs to change.Q: How will the evolution of the exhibition be?A: Our concentration’s ability has been reduced, now all of us are multitasked, we domany things at the same time and we demand it in the way we produce and receiveaudiovisual content.When we show the movie we will do it offering live music and the exhibition will notbe just on the screens and screenings will not be just on cinemas but also inrestaurants etc. In these moments of change the good thing is that you can experimentand do whatever you want. When you pull down a building you have a lot of work todo because you need to raise it again, but you can build it in the way you like.   39  
  42. 42. Q: Is Arròs Movie entirely finance by crowdfunding?A: We created a crowdfunding campaign in the platform Verkami, in 40 days wereceived 8,600€, but we also have received 24,000€ from the Culture Department ofthe Generalitat (the Government of Catalonia).The crowdfunding is linked with the neoliberalism because these ideas support thatthe State should not be involve in the culture financing. We do not think public fundsshould disappear, what we think is the way the public administration gives the fundsshould be different. Now, there are some experts who decided which projects receivethe funds but if you have a project with 200 people supporting you in the Internet theyshould consider your project because it has popular support. Maybe the way of givingthe funds should be via crowdfunding, leaving people to vote through the Internetwhich project should receive the funds.Q: Will crowdfunding model coexist with the public and private financing?A: Yes, it will, especially in cinema because it is really expensive to make. Building acinema production just with crowdfunding is not possible. It might be possible in theUnited States because they have a different mind, there the State does not supportculture, but the Spanish State does it and we think we have a richer culture here thanin the USA so we support the public funds system.Thanks to crowdfunding your project is known and as a creator you have the chanceto introduce your project to a stronger investor, a company or an institution.Crowdfunding is not just about collective financing, is building projects in acollective way.   40  
  43. 43. Q: How was the relationship with the people who has supported you viacrowdfunding?A: During the crowdfunding campaign we involved the community that we have beenbuilding since the beginning of the collective, and we have been adding more peoplethanks to the events we have been producing.Q: Will you licence Arròs Movie by Creative Commons?A: When you licence your project with copyright all the rights are reserved, so anyonewho wants to reproduce or use part of the work needs to contact the author; thecreative commons is between the copyright and the public control where everyonecould do whatever they want. So yeah, we will do it.Q: How the movie will be distributed?A: A year a go we launched the project and now we have filmed the 80% of themovie, we are editing it but we have not fixed the distribution strategy yet. We areinvestigating new ways of distribution because if theatrically exhibition is notworking anymore is because of something and we want to change the experience ofwatching a movie.   41  
  44. 44. Appendix BInterview to Nicolás AlcaláDirector of The CosmonautMadrid, 2nd August 2011; 3rd November 2011The Cosmonaut is a transmedia sci-fi movie partly financed by crowdfunding licensedby creative commons. Currently the movie is on postproduction.Question (Q): How did The Cosmonaut idea come up?Answer (A): The Cosmonaut project was born as a short film. The three innovativeparts of The Cosmonaut are crowdfunding, creative commons and transmedia.We already knew the creative commons from previous project. The crowdfundingpart came up from the need of finding funds through alternative ways. We were partof a small and young production company and do us, so it was hard to ask for publicfunds. We learnt what transmedia was during the process and we loved the idea ofbreaking up the traditional storytelling.The challenge was putting everything together in a new model of production,financing, and distribution that is what surrounds the movie.Q: Why did you choose crowdfunding as a way to finance the project?A: Because crowdfunding is the best way to impulse a new project and build acommunity. We did not know how it would work but we knew from some indiecinema that was developing new ways of communication between the creator and theaudience, we liked that idea and a way to apply it was through crowdfunding.   42  
  45. 45. Q: What percentage of the movie is financed by crowdfunding?A: In the early beginning we had in mind a 6% but when we launched the Save theCosmonaut campaign this figure increased to 14%.Q: This is an innovative project that has showed a new business model, is itnecessary to break the traditional model?A: In cinema, like other industries every “some” years there is a paradigm changebecause of a technological or political change making the old business modelsobsolete. At these moment is necessity to renew the business.It happened on cinema with the arrival of the talkies, the special effects, 3D and so on.Currently we are experience one of the most dramatic technological change turningobsolete many business that were based on shortage and charging for the right ofwatching. Thanks to the Internet this is changing, technology gives audience the rightto watch audiovisual content when, where, and how they want. This project wants tooffers to the audience a product in the way they want.Q: How The Cosmonaut will be distributed?A: We live in a world where it is really easy to copy, we have tried to adapt to itoffering the movie in the way people want to consume it. For this reason we areshowing the movie at the same time on cinemas, DVD, the Internet, and if we arelucky on TVs too. The movie could be watched without any cost on the Internet butwe will offer to the spectator the chance of paying for added value. On cinema wewant to create an experience, is not the idea of going to the cinema because is the onlyway of watching the movie is the idea of going to the cinema because it becomes anevent. We will make an international premiere on a big theatre with an afterwardsparty and then we will encourage people from different parts of the world to maketheir own premieres and share with us this experience of creating an event.   43  
  46. 46. On the DVD case we will give an added value too. It will be the first movie in Spainedited on USB. We will produce a DVD edition and another one in USB.Q: This way of distribution breaks the traditional distribution and exhibitionmodels, doest it come up as a necessity of filmmakers to approach to theiraudience?A: Further than a creator’s necessity is an opportunity. Before, creators locked up tocreate their works; if they were lucky the distributor did a good job and these workswould arrive to an audience.At his moment we have the opportunity to contact this public, talk to them, ask themfor a feedback and ask them to participate on the project. Everything has turned richerbecause is the user the one who helps on the production and distribution, who sharesit, comment it and so on.Q: Would the Internet and the new technologies break down the traditionaldistribution and exhibition models?A: In the future, the new models will coexist with the old ones. It is not the end oftheatrical exhibition, and is not the end of an established industry that would keepworking in a more conservative way. There will be bigger gaps between high budgetproducts and low budget films. It will be the end of the six million euro budget films;there will be movies made with one million euro and movies made with $50 millionslike the Hollywood ones. The biggest ones will still have the market they already havebecause they have money for marketing, and the smalls ones will have it easier toreach to new channels and new models.From now to ten years the exhibition model will change a lot too. Personally, I bet onsmaller theatres instead of big multi screen cinemas, I bet on small theatres where youcan rent the place with your friends choosing in a digital catalogue what you want towatch, from Casablanca to Transformers 5, basically a more personal model.   44  
  47. 47. Q: The Cosmonaut has been partially finance through crowdfunding, how wasthe experience? Would be possible to finance an entire movie throughcrowdfunding in the future?A: Our crowdfunding experience was really exciting, it was an adventure, it wasreally difficult, long and tedious, but at the same time it was truly gratifying. Everyday there were more and more people supporting us. One week before the shooting aninvestor changed his mind and we run out of money so we launched the campaignSave the Cosmonaut. We needed €120,000 and we reached €130,000 in just four daysbeating any record. It was unbelievable and thanks to it we could film the movie. Itwas something unique and especial and we are proud of have make History. I do notknow if this experience would be repeatable but I hope so.Some American projects are achieving but it depends on many factors. I do not thinkit will be the only way of financing cinema, not even for low budget cinema becausemaking movies is really expensive. Crowdfunding will be a way to start a project;especially to those independent movies that do not have another way of being showedbut thanks to crowdfunding they could pave a way. It is a good shuttle for newprojects.   45  
  48. 48. Appendix CThe Cosmonaut Financial Plan:* Download from its website: have planned three ROUNDS OF INVESTEMENT1st Round. For ever y 1000€ we receive a 0,1% of the net benefits of the project once this has ended. Expectations of investment for the first stage: 30.500€ (3,41%)*To this percentage we have to add up the part that is saved for the crewmembers, which have a right over the future benefits of The Cosmonaut for having differed their payment. At the end of this stage, therefore, the 19,57% of the propertyof the project will have an owner..2nd Round. For ever y 5000€ we receive 1% of the net benefits of the project once this has ended. Expectations of investment for the second stage: 180.000€ (55,57% of the total amount of the pro- ject)3Rd Round. For every 13000€ we receive 1% of the net benefits of the project once this has ended.During the first 12 months since the project was launched, we have finished with the first round of financing and we’ve singed a total of 23 contracts, achieving the amount of 30,000€ from our inves- tors. •Crowdfunding.It is completely horizontal: every producer receives the same privileges whatever they contribute with.The minimum contribution is 2€. With this, they start receiving something back:• A WELCOME PACk, including a badge and two stickers• A producer CERTIFICATE• The APPAREANCE in the web and THE CREDITS OF THE FILM• The POSSIBILITY OF WINNING AN AUTHENTIC COSMONAUT SUIT.If someone wants to contribute with more,he ALWAYS receives something back. Instead of a “donation” system, this is a buying system. He can buy products in our   46  
  49. 49. on-line shop. •Sponsorship.We truly believe in a creative, non-invasive and really productive advertisement forthe audience as one of the best ways of financing a project like ours.. •The Cosmonaut: An EXPERIENCEEvents with a high participation present a huge possibility for brands to get involved. As the project moves on there will be more and of larger magnitude, with live connections in different events and cities, creating a very special event the day of the film’s premiere. •Distribution Pre-Sales.The presales that we would be able to make to televisions, VOD platforms and distributors all around the world will be subjected to our distribution model that won’t allow us certain uses, but that open a wide range of possibilities.   47  
  50. 50. Appendix DSkype Interview to Ignasi LabastidaCreative Commons Spain23rd November 2011Creative Commons (CC) is an American company focused in open licenses; theyhave delegations all around the world.Question (Q): What are the Creative Commons (CC)?Answer (A): These licences are a legal document; there is not an only licence but six.They go from allowing the copy and any kind of exploitation of the work to justallowing the copy with the requirement of quoting the author. In between these sidesthere are more models like allowing derived work and the copyleft, this is theWikipedia’s case.Q: What are the differences between the CC and the copyright?A: Every licence is based on the copyright; these licences are made to protect theauthor’s rights. The need of creating the licences came up when the fact of do notlicensing a work meant the “all the rights reserved”. It was necessary to say what theauthor wanted to allow and in which conditions. The difference between thetraditional copyright and the CC is the author allows more uses depending on the kindof licence he/she chooses.Q: Are the CC and the copyleft the same kind of licence?A: The copyleft is a kind of copyright because is based on the author’s rights;however, if we understand copyright as all the rights reserved then the copyleft is adifferent licence. The pure description of copyleft would be the author allows   48  
  51. 51. everything with the condition of quoting him/her and the derived work should keepthe copyleft conditions. Following this definition just one of the six CC licences iscopyleft. When mass media talks about the copyleft culture they usually mix theentire open licences concept.Q: The birth of the CC licences is strongly linked to the Internet, could anaudiovisual CC work be distributed and exhibited through the traditionalmedia? A: The birth of the CC is linked to the Internet but these licences can be used in anyformat, the Internet has given us the facility of distribute and exhibit these works. Itcould be understood as a problem to keep the traditional copyright structure but theselicences can be applied in any work, further than digital products there are CDs,books, and films licensed in CC.Last week was the premiere in Barcelona of the first CC film theatrically released inSpain. It means that in the future movies could be disturbed on the net in a more openway.It is important to know the distribution model is not restricted by the use of thelicences, filmmakers can ear money showing their CC movies too, in other words,when we talk about open culture we do not mean these works should actually be free.Author can ask a price to watch his/her work but once the user has acceded to it,he/she can uses this content depending on the kind of licence.It is true that most of the CC works are in the net because most of the people whowork in the digital world think that is necessary to do not restrict all the rights.   49